USD/CNH dips below 200-hour MA as US and China reach consensus on trade issues

USD/CNH dips below key average on renewed trade optimism.
The US and China have a history of backtracking on positive comments.

Omkar Godbole FXStreet Contributor

The offshore Yuan (CNH) has picked up a bid, pushing the USD/CNH pair below key support on reports that China and the US have reached a consensus on solving trade issues.

Xinhua, China's official news agency, reported that the US and China have agreed to continue phase one negotiations.

Meanwhile, China's Commerce Ministry said that Vice Premier Liu He and the US Trade Representative Robert Lighthizer and Treasury Secretary Mnuchin discussed core issues of concern and reached consensus on resolving relevant problems via a phone call.

The renewed trade optimism is boding well for Yuan and other risky assets. The USD/CNH pair is currently trading just below the 200-hour MA support of 7.0275, having hit a low of 7.0175 soon before press time.

Meanwhile, the futures on the S&P 500 are now reporting a 0.25% gain. The index futures were flatlined in early Asia.

Note that trade optimism had faded on Monday with reports stating that two sides are struggling to ink the phase one of the trade deal and the ambitious phase two of the deal may not happen anytime soon.

The renewed trade optimism may not yield big gains in risky assets. After all, both sides have a history of backtracking on positive comments. Investors, therefore, are likely to remain cautious.

Technical levels

USD/CNH

Overview
Today last price	7.0252
Today Daily Change	-0.0064
Today Daily Change %	-0.09
Today daily open	7.0316

Trends
Daily SMA20	7.0244
Daily SMA50	7.0719
Daily SMA100	7.0472
Daily SMA200	6.9243

Levels
Previous Daily High	7.0429
Previous Daily Low	7.0274
Previous Weekly High	7.0536
Previous Weekly Low	7.0046
Previous Monthly High	7.1705
Previous Monthly Low	7.0295
Daily Fibonacci 38.2%	7.0333
Daily Fibonacci 61.8%	7.037
Daily Pivot Point S1	7.025
Daily Pivot Point S2	7.0184
Daily Pivot Point S3	7.0095
Daily Pivot Point R1	7.0406
Daily Pivot Point R2	7.0495
Daily Pivot Point R3	7.0561

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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